The ruble is hitting new lows, as oil falls to prices not seen since 2009. Deputy Prime Minister Igor Shuvalov says the country’s economy won’t be hurt, and federal funding from the budget will be met.

A dollar bought more than 53 rubles at 2:20pm on the Moscow stock exchange
on Monday. The sharp decline in the price of the Russian currency
comes as Brent crude traded at $69.46 a barrel at 1:30pm MSK.

The euro has also hit a record exchange rate reaching 65 rubles
at 1:30pm MSK. Both currencies gained nearly two rubles from
Friday’s closing price.

The depreciation of the Russian currency intensified after the
November 27 OPEC meeting which decided not to cut oil production.
The quotas were left unchanged at 30 million barrels per day.

Shuvalov said he expected oil prices to go up soon, as the coming
cold should increase the demand.

“All experts predict an increase in consumption of oil and
gas. But even if these predictions of higher prices don't follow
through, we have a safety net - we have nothing to worry
about,” he said.

“The Bank of Russia has allowed the ruble tofloat freely. It's becoming cheaper, but
the budget capacity won't change. And we will meet all the
obligations of the federal budget.”

Russian Economic Development Minister Aleksey Ulyukaev also
said over the weekend that the drop in oil
prices won’t affect the country’s economy, as the revenue
received in dollars is balanced out the changing currency rates.

Low oil hitting world economies

The less wealthy OPEC countries that depend on crude exports for
the majority of their income are likely to be hit the most by the
cartel’s decision not to cut production.

Countries like Venezuela and Nigeria do not have the same
low-cost production or reserves as Saudi Arabia, and will be
facing a hard challenge to maintain their social obligations.

Ahead of the OPEC meeting, Venezuela was pushing for a cut in
production, as it needs oil to settle above $120 to balance its
budget. As a result, the country’s oil income has fallen by 35
percent in the past month, said President Nicolas Maduro on state
television last week.

Iran needs a price at $140 per barrel to balance its budget.
Money received from crude exports pay for more than 50 percent of
government spending.

Nigeria has devalued its currency by nearly 10 percent and
increased interest rates to a record 13 percent. The government
is planning to cut spending by 6 percent next year, according to
Finance Minister Ngozi Okonjo-Iweala.

Other countries outside OPEC which rely on income from oil have
also experience a negative impact, says RT’s correspondent Murad
Gazdiev.

In Europe, Norway has seen the kroner lose almost a fifth of its
value against the dollar in 2014. Neighboring Denmark is also
ringing alarm bells as the country’s budget is reliant on the
price of oil.

Even in the US, which expects to become the largest oil producer
by boosting shale production, some fracking companies involved in
extracting shale oil have lost 70 percent of their value in
recent months, and are going to lose even more if the price of
traditionally extracted oil continue to go down.

Some experts describe the current situation with oil prices as
the result of OPEC squeezing out “frackers” and trying to
establish a monopoly in the conventional oil market.